Gene, Though there are huge exceptions, the state of Washington, for example, is the home of a major bubble stock <g>, I think what you are saying has some merit. However, I believe that the crashing of tech stocks will be worse for New York, especially The City, than California.
I don't predict any end in the growth of technology, and my birth state is still by far the most innovative and best educated in the country to take advantage of that growth. What I am predicting is an end in the valuation of tech stocks by multiples of their real worth by anything from 5 to 100 times. Yes, that will hurt the paper millionaires, but most will still draw their salaries, which may be enough to pay their bills.
The ones who will get hurt are those making loans to the speculators. I know that there has been some pulling back on loaning against red ink internut paper, but the increase in lending against shares of "blue chip" tech stocks has more than made up for it. So, it isn't Vignette falling from $140 to $12 that will kill the banks. They won't lend you money on that crap anyway. It is when Cisco or Lucent or IBM falls 60% or more when the crunch will come.
So, I do not think the crunch will hit equally and California will probably be in for a large dose, but it is the New York financial scamsters who should take the biggest hits. |
